WASHINGTON - THE World Bank said Wednesday it had barred seven firms - four from China and three from the Philippines - from bidding on its projects due to alleged corruption.

The firms were involved in a road project in the Philippines financed by the Washington-based bank.

Investigation by the bank 'uncovered evidence of a major cartel involving local and international firms bidding on contracts under phase one of the Philippines National Roads Improvement and Management Programme, known as NRIMP 1,' the bank said in a statement.

The probe 'closely analysed the procurement process the firms participated in and conducted numerous interviews before closing the investigations and initiating sanctions proceedings against the entities,' it said.

No World Bank funds from the project were disbursed to the now-sanctioned firms, the statement said, adding that it had stopped about US$33 million (S$49.3 million) from being awarded.

'This is one of our most important and far-reaching cases, and it highlights the effectiveness of the World Bank's investigative and sanctions process,' said Leonard McCarthy, World Bank vice president for integrity.

'As the World Bank Group continues to ramp up its anti-corruption work, (it) will remain vigilant in investigating allegations and holding wrongdoers accountable,' he said.

The bank was also in the process of conducting a worldwide review of its activity in the roads sector, Mr McCarthy said. He did not elaborate.

China Road and Bridge Corp was debarred for eight years, China State Construction Corp and China Wu Yi Co for six years, and China Geo-Engineering Corp for five years.

Philippine firm E.C. de Luna Construction Corp and its sole proprietor, Eduardo de Luna, were both debarred indefinitely - the first permanent debarments since 2004, the bank said.

The other Philippine firms, Philip-Cavite Ideal International Construction and Development Corp and CM Pancho Construction, Inc, were each debarred for four years.

Another South Korean firm, Dongsung Construction Co, was separately debarred in August 2008 for four years for alleged fraudulent and corrupt practices in relation to the project, the bank said. -- AFP